EMPCT WORKING PAPER SERIES The EMPCT Working Paper Series is a collection of recent research publications or working papers by the scholars affiliated with the Empirical Macroeconomics Policy Center of Texas. Superstars or Supervillains? Large Firms in the South Korean Growth Miracle EMPCT Working Paper Series No. 2026-02106 pages | PDF Download | PDF in BrowserChoi, Jaedo, Andrei A. Levchenko, Dimitrije Ruzic, and Younghun Shim, “Superstars or Supervillains? Large Firms in the South Korean Growth Miracle,” March 2026. AbstractWe quantify the contribution of the largest firms to South Korea’s economic performance over theperiod 1972-2011. Using firm-level historical data, we document a novel fact: firm concentrationrose substantially during the growth miracle period. To understand whether rising concentrationcontributed positively or negatively to South Korean real income, we build a quantitative dynamicheterogeneous firm small open economy model. Our framework accommodates a variety of potentialcauses and consequences of changing firm concentration: productivity, distortions, selectioninto exporting, scale economies, and oligopolistic and oligopsonistic market power in domesticgoods and labor markets. The model is implemented directly on the firm-level data and invertedto recover the drivers of concentration. We find that most of the differential performance of the topfirms is attributable to higher productivity growth rather than increasingly favorable distortions.Exceptional performance of the top 3 firms within each sector relative to the average firms contributed20.8% to the 2011 real GDP and 6.6% to the net present value of welfare over the period1972-2011. Thus, the largest Korean firms were superstars rather than supervillains. Reference No.TitleAuthor(s)Download 2026-02Superstars or Supervillains? Large Firms in the South Korean Growth MiracleJaedo Choi, Andrei A. Levchenko, Dimitrije Ruzic, and Younghun ShimPDF, 1.1MB 2026-01A Behavioral Heterogeneous Agent New Keynesian ModelOliver Pfäuti and Fabian SeyrichPDF, 1.5MB 2025-10How Monetary Policy Is Made: Lessons from Historical FOMC DiscussionsCooper Howes, Marc Dordal i Carreras, Olivier Coibion, and Yuriy GorodnichenkoPDF, 3.5MB 2025-09The Economic Impact of Mass DeportationsJavier Cravino, Andrei A. Levchenko, Francesc Ortega and Nitya Pandalai-NayarPDF, 8.2MB 2025-08The Impact of Geopolitical Risk on Consumer Expectations and SpendingYuriy Gorodnichenko, Dimitris Georgarakos, Geoff Kenny, and Olivier CoibionPDF, 1 MB 2025-07The Dynamics of Technology Transfer: Multinational Investment in China and Rising Global CompetitionJaedo Choi, George Cui, Younghun Shim, Yongseok ShinPDF, 0.9 MB 2025-06The Inflation Attention Threshold and Inflation Surges (Revised)Oliver PfautiPDF, 2.1 MB 2025-05INFLATION, EXPECTATIONS AND MONETARY POLICY: WHAT HAVE WE LEARNED AND TO WHAT END?Olivier Coibion, Yuriy GorodnichenkoPDF, 1.3 MB 2025-04Firms’ Inflation and Wage Expectations During the Inflation SurgeErwan Gautier, Frédérique Savignac, Olivier CoibionPDF, 4.5 MB 2025-03Attention to the MacroeconomySebastian Link, Andreas Peichl, Oliver Pfauti, Christopher Roth, Johannes WohlfartPDF, 1MB 2025-02Fast and Slow Technological TransitionsRodrigo Adão, Martin Beraja, Nitya Pandalai-NayarPDF, 2.2MB 2025-01How Costly Are Business Cycle Volatility and Inflation? A Vox Populi ApproachGeorgarakos, Dimitris, Kwang Hwan Kim, Olivier Coibion, Myungkyu Shim, Myunghwan Andrew Lee, Yuriy Gorodnichenko, Geoff Kenny, Seowoo Han, and Michael WeberPDF, 1.3MB 2024-01Keeping Up with the Jansens: Causal Peer Effects on Household Spending, Beliefs and HappinessMaarten van Rooij, Olivier Coibion, Dimitris Georgarakos, Bernardo Candia, and Yuriy GorodnichenkoPDF, 2.1 MB 2024-02The Inflation Attention Threshold and Inflation SurgesOliver PfäutiPDF, 1.8 MB 2024-03Illiquid Lemon Markets and the MacroeconomyAimé Bierdel, Andres Drenik, Juan Herreño, Pablo OttonelloPDF, 10 MB 2024-04Relative-Price Changes as Aggregate Supply Shocks Revisited: Theory and EvidenceHassan Afrouzi, Saroj Bhattarai, and Edson WuPDF, 1.5 MB 2024-05Monetary Policy without Moving Interest Rates: The Fed Non-Yield ShockChristoph E. Boehm and T. Niklas KronerPDF, 1.4 MB 2024-06Concentration,Market Power, andMisallocation: The Role of Endogenous Customer Acquisition*Hassan Afrouzi, Andres Drenik, and Ryan KimPDF, 5.9 MB 2024-07Playing with blocs: Quantifying decouplingBarthélémy Bonadio, Zhen Huo, Elliot Kang, Andrei A. Levchenko, Nitya Pandalai-Nayar, Hiroshi Toma, Petia TopalovaPDF, 4.2MB 2024-08Weathering the Storm: Supply Chains and Climate RiskJuanma Castro-Vencenzi, Gaurav Khanna, Nicolas Morales, Nitya Pandalai-Nayar,PDF, 11.7 MB 2024-09Dynamic Models, New Gains from Trade?Christoph E. Boehm, Andrei A. Levchenko, Nitya Pandalai-Nayar, Hiroshi TomaPDF, 780.3 KB
